Supplemental health insurance policies pay for health benefits not covered by your major medical policy. Two common supplemental health insurance policies are cancer insurance policies and Medigap insurance policies

Cancer can strike anyone, regardless of gender, age, or lifestyle. If cancer runs in your family, you might be especially concerned about your risk. There is insurance sold specifically to cover you if you should get cancer.

Here are a few questions you should have answered before you purchase cancer insurance:

• What does the policy pay for? Make sure everything is covered: A good policy will pay for hospital stays, medicine, surgery, doctors visits, radiation treatment, and chemotherapy.
• Does the policy offer increased benefits after an extended hospital stay? Some policies might promise increased benefits after a lengthy hospital stay (longer than 90 days). According to the Wisconsin Office of Insurance, the average hospital stay in relation to cancer is 13 days.
• Are cancer-related illnesses covered? Cancer, along with its treatments, can lead to other physical problems, such as infections, diabetes, and pneumonia. Most cancer policies do not cover treatment for these illnesses.
• Will travel expenses be covered? Often, cancer treatments require travel to a hospital hundreds of miles away. Many cancer policies will cover these travel expenses. Some policies will cover not only the travel of the patient, but also of companions as well.
• Will your medical policy pay duplicate benefits? While most cancer insurance policies will pay out even if you are already getting health coverage under another policy, the reverse may not be true. Some major medical policies will not pay out if you hold other coverage, such as cancer insurance.

Cancer insurance policies can be purchased individually or sometimes through your employer. Insurers typically exclude you if they know you already have cancer. An insurer may alter premium payments on the basis of your lifestyle or family history.

Most cancer insurance policies pay out a lump sum benefit upon diagnosis. Some of them continue to pay for various costs, according to policy guidelines, but others provide simply the one-time lump sum and then the coverage ends.

Your premiums will be more expensive if you want a larger lump-sum payment, or if you want the rest of your family to be covered. Your premiums may also increase as you get older.

Opinions differ on whether or not cancer insurance is a "good buy." While it does cover a major financial catastrophe (getting cancer can certainly be expensive with its potential for requiring treatment and time away from work), it does not provide comprehensive coverage for any other illness or injury. Cancer insurance is just that: for cancer only. It will not cover you for heart disease, stroke, diabetes, or high blood pressure.

You are better off buying comprehensive medical coverage and disability insurance to help compensate you if you lose time from work due to any serious illness or injury, according to the Consumer Federation of America.

The Health Insurance Association of America (HIAA) emphasizes that cancer insurance should be viewed as extra coverage on top of what a consumer needs. The American Cancer Society concurs. In its official statement on cancer insurance, it says, "Cancer insurance is supplemental, not a substitute for comprehensive coverage."

The American Cancer Society also emphasizes the need for consumers to fully understand such a policy before purchasing it. The organization believes that insurance companies bear the responsibility for making the policy terms understandable to consumers by writing it in "clear unequivocal language."

You should consider your family history and lifestyle when deciding whether to purchase a policy. Even if these factors do not figure in your premiums, they certainly can factor into whether you are at risk for getting cancer.

One in two men and one in three women may contract cancer during their lives, according to the American Cancer Society. This means one in two men and two in three women do not.

Health insurance decisions do not disappear when you or a relative become eligible for Medicare. In order to be fully covered, Medicare beneficiaries may need to choose a supplemental policy.

If you enroll in traditional Medicare, the fee-for-service arrangement remains. Medicare Part A pays for care in a hospital or skilled nursing facility, as well as for home health and hospice care. Medicare Part B pays for treatment by physicians, outpatient hospital care, and other medical services. The problem is that traditional Medicare does not pay for prescription drugs and it will not cover every medical charge or service. Medicare supplements — also known as Medigap -- plug the gaps left by traditional Medicare.

While Medicare is a government program, Medigap policies are offered by private insurance companies. As a general rule, insurance policies are subject to state regulation. Medigap policies, however, are regulated by both the state and the federal government. The federal government has authorized 10 standardized Medigap policies: Plans A through J. Depending on where you live, all 10 of these standard policies — or only a few — may be offered. If an insurance company wants to sell Medigap policies, it must sell at least Plan A.

To purchase a Medigap policy that is right for your situation, you need to buy the policy with the right letter. Plan A offers a very basic supplement to Medicare coverage. Plan J offers much more coverage but is also more expensive. Do not confuse the Medigap policy designations with Medicare Parts A and B.

Each plan s letter coverage is the same from insurance company to insurance company. For example, no matter which company is selling the policy, Plan C will contain the same coverage. (However, insurers in Massachusetts, Minnesota, and Wisconsin are permitted to sell somewhat different combinations of benefits.)

Medigap policies will generally pay most or all of the Medicare coinsurance amounts. They may also cover Medicare deductibles. Certain plans will also pay for outpatient prescription drugs, preventive care, and emergency medical care in a foreign country.

While some plans may offer limited coverage for home health care, remember that a Medigap policy does not pay for custodial care in a nursing home. Medigap plans are in no way a substitute for long term care insurance.

Instead of opting for traditional Medicare, supplemented by a Medigap policy, you may decide to choose Medicare managed care, which often provides prescription drug coverage. Medicare beneficiaries can select an HMO, PPO, or one of several other Medicare+Choice options. Be aware, however, that the number of Medicare HMOs that have left the marketplace due to unprofitability has risen steadily in recent years.